72t modification/penalty with multiple IRA accounts

Client has four IRA accounts with 72t distributions (not currently my client by the way). Age 57 1/2 currently.

If she modified one of these IRAs and chose to pay the penalty on the past distributions:
1. Does this impact any of the other IRA accounts?
2. Could she take a lump sum from this IRA account and then modify the distribution going forward? Or would that be considered a new 5 year rule at that point?



Does she have one 72t plan using 4 IRA accounts (ie all 4 accounts were considered for the initial account balance), or does have 4 different plans started at different times each using one IRA account?

She can bust a plan without affecting other plans, but if she used the balance of all 4 accounts to establish a single plan, then taking out the incorrect amount busts the plan. Note that if she uses all 4 IRA accounts for a single plan, she can vary the amounts distributed by each IRA, but the annual total must be exactly correct.

Once you determine if a plan has been busted and how many accounts were involved, that plan is ended. She could then start a new plan, but it would require starting another 5 year term.

It also needs to be determined when she busted the plan in order to report the penalty correctly on Form 5329.



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